[Federal Register Volume 72, Number 191 (Wednesday, October 3, 2007)]
[Notices]
[Pages 56425-56427]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-19535]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56545; File No. SR-NYSEArca-2007-95]


Self-Regulatory Organizations; NYSEArca, Inc.; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change To Amend Rules 
7.34 and 7.35

September 27, 2007.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on September 17, 2007, NYSE Arca, Inc. (``NYSE Arca'' or 
``Exchange''), through its wholly owned subsidiary, NYSE Arca Equities, 
Inc. (``NYSE Arca Equities'' or ``Corporation''), filed with the 
Securities and Exchange Commission (``Commission'' or ``SEC'') the 
proposed rule change as described in Items I, II and III below, which 
Items have been substantially prepared by the Exchange. NYSE Arca has 
designated this proposal pursuant to Section 19(b)(3)(A) of the Act \3\ 
and Rule 19b-4(f)(5) \4\ thereunder, which renders the proposal 
effective upon filing with the Commission. The Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(5).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes, among other minor changes, to amend NYSE 
Arca Equities Rule 7.35 in order to reduce the Opening, Market Order, 
and Closing auction lock-out period to one minute. The text of the 
proposed rule change is available at the Exchange, the Commission's 
Public Reference Room, and www.nyse.com.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of, and basis for, the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has substantially prepared summaries, set 
forth in sections A, B, and C below, of the most significant aspects of 
such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend NYSE Arca Equities Rule 7.35 in 
order to reduce the Opening, Market Order, and Closing Auction lock-out 
periods to one minute.\5\ The Exchange believes that compressing the 
lock-out periods will offer its Users \6\ greater order entry or 
cancellation flexibility and more informed market participation by 
allowing its Users to benefit from the dissemination of auction related 
information for an additional minute prior to the lock-out periods.
---------------------------------------------------------------------------

    \5\ NYSE Arca Equities Rule 7.34(a) provides for three equities 
trading sessions on the Exchange: The Opening Session (4 a.m. to 
9:30 a.m. Eastern Time (``E.T.'')), the Core Trading Session (9:30 
a.m. to 4 p.m. E.T.), and the Late Trading Session (4 p.m. to 8 p.m. 
E.T.).
    \6\ See NYSE Arca Rule 1.1(yy) for the definition of ``User.''
---------------------------------------------------------------------------

Opening Auction
    Pursuant to NYSE Arca Rule 7.35(a)(4), Users are currently 
prevented from cancelling orders that are eligible

[[Page 56426]]

for the Opening Auction in the last two minutes prior to the Opening 
Session until the conclusion of the Opening Auction. The Exchange 
proposes to reduce this freeze or lock-out period to one minute.
Market Order Auction
    Pursuant to NYSE Arca Rule 7.35(c)(2), Users are also currently 
prevented from entering certain orders for the final two minutes before 
the Opening Auction and the Start of the Exchange's Core Trading 
Session. Specifically, Market Orders and Auction-Only Limit Orders may 
not be entered on the same side as the imbalance between 6:28 a.m. 
(Pacific Time) and the conclusion of the Market Order Auction. Also, 
Limited Price Orders not eligible for the Opening Session, Market 
Orders, Auction-Only Limit Orders, and Cleanup Orders may not be 
cancelled between 6:28 a.m. (Pacific Time) and the conclusion of the 
Market Order Auction. The Exchange proposes herein to amend NYSE Arca 
Rule 7.35(c)(2)(A)(1)(iii) and NYSE Arca Rules 7.35(c)(2)(A)(2) & (3) 
to compress these freeze or lock-out periods to one minute. In 
addition, the Exchange proposes to amend NYSE Arca Rules 7.35(d)(1) & 
(2) in order to compress the lock-out periods governing the execution 
eligibility of Limit Price Orders and Market Orders entered before the 
Market Order Auction to one minute, from 6:28 a.m. (Pacific Time) to 
6:29 a.m. (Pacific Time). Similarly, the Exchange proposes amending 
Rule 7.34(d)(1)(H) to permit Limit Price Orders designated for the Core 
Trading Session, entered for an additional minute up until 6:29 a.m. 
(Pacific Time) (instead of 6:28 a.m. Pacific Time), to participate in 
the Market Order Auction.
Closing Auction
    Further, according to NYSE Arca Rule 7.35(e)(2)(B), Market-on-Close 
Orders and Limit-on-Close Orders may not be cancelled between 12:58 
p.m. (Pacific Time) and the conclusion of the Closing Auction. In 
addition, according to NYSE Arca Rule 7.35(e)(2)(C), Market-on-Close 
Orders and Limit-on-Close Orders may not be entered on the same side as 
the imbalance between 12:58 p.m. (Pacific Time) and the conclusion of 
the Closing Auction. The Exchange proposes to compress the lock-out 
periods for either entering or cancelling certain orders preceding the 
Closing Auction, as described above, from two minutes to one minute.
Exchange Traded Funds
    The Closing Auction for Exchange Traded Funds (``ETFs'') commences 
at 1:15 p.m. (Pacific Time). Pursuant to NYSE Arca Rule 7.35(e)(3)(E), 
Closing Auctions for ETFs follow the same two-minute freeze or lock-out 
limitations described above. Specifically, Market-on-Close Orders and 
Limit-on-Close Orders may not be cancelled, and Market-on-Close Orders 
and Limit-on-Close Orders may not be entered on the same side as the 
imbalance between 1:13 p.m. (Pacific Time) and the conclusion of the 
Closing Auction.\7\ Consistent with the above described rule change 
pertaining to Closing Auctions, the Exchange proposes reducing this 
lock-out period to one minute.
---------------------------------------------------------------------------

    \7\ Pursuant to telephone conversation between Hong-Anh Tran, 
Special Counsel, Division of Market Regulation, and Andrew Stevens, 
Assistant General Counsel, Exchange, dated September 19, 2007.
---------------------------------------------------------------------------

    By compressing the lock-out periods to one minute as described 
above, Users will benefit from the dissemination of auction related 
information for an additional minute resulting in greater order entry 
or cancellation flexibility and more informed market participation. The 
Exchange intends this system change to be effective on filing and 
operative on September 17, 2007.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act \8\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act \9\ in particular, because it 
is designed to prevent fraudulent and manipulative acts and practices, 
to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in facilitating 
transactions in securities, and to remove impediments to and perfect 
the mechanism of a free and open market and a national market system.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change effects a change in an 
existing order-entry or trading system of a self-regulatory 
organization that: (i) Does not significantly affect the protection of 
investors or the public interest; (ii) does not impose any significant 
burden on competition; and (iii) does not have the effect of limiting 
the access to or availability of the system, it has become effective 
pursuant to Section 19(b)(3)(A) \10\ of the Act and Rule 19b-4(f)(5) 
\11\ thereunder. At any time within 60 days of the filing of such 
proposed rule change, the Commission may summarily abrogate such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(5).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to [email protected]. Please include 
File Number SR-NYSEArca-2007-95 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2007-95. This 
file number should be included on the subject line if e-mail is used. 
To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, 
all written statements with respect to the proposed rule change that 
are filed with the Commission, and all written communications relating 
to the proposed rule change between the

[[Page 56427]]

Commission and any person, other than those that may be withheld from 
the public in accordance with the provisions of 5 U.S.C. 552, will be 
available for inspection and copying in the Commission's Public 
Reference Room, 100 F Street, NE., Washington, DC 20549, on official 
business days between the hours of 10 a.m. and 3 p.m. Copies of such 
filing also will be available for inspection and copying at the 
principal office of the Exchange. All comments received will be posted 
without change; the Commission does not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File Number SR-NYSEArca-2007-95 and should be submitted on or before 
October 24, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

    \12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-19535 Filed 10-2-07; 8:45 am]
BILLING CODE 8011-01-P